An auditor’s report about the District of Columbia’s homelessness programs has Laura Green Zeilinger “very concerned” about charges billed by a non-profit contractor. “I’m very eager to get a number of questions answered,” said Zeilinger, acting director of the Human Services Department. (Astrid Riecken/For The Washington Post)

An auditor’s report on the District’s programs for the homeless found that its main contractor overbilled the city by more than $5.3 million last year, largely through the use of an accounting practice that appears to be a violation of city and federal law.

The review also found that the contractor, the nonprofit Community Partnership for the Prevention of Homelessness, had inadequately distinguished between programmatic and administrative costs, a key indicator of whether funds are spent efficiently.

The review, conducted at the request of D.C. Council member Mary M. Cheh (D-Ward 3), has triggered an official audit of spending by the District’s Department of Human Services and the Community Partnership on programs for homeless people. The report also calls for greater oversight by the administration and the D.C. Council.

“This is just a start. But of itself, it revealed things that were worrisome,” Cheh said late Thursday. “The reason why I asked the auditor to do this is we spend a huge amount of money on homeless programs. . . . The Community Partnership has had this contract year after year after year, and it’s a lot of money, and I just had an instinct that nobody was minding the store sufficiently.”

Cheh said she was looking into whether legislative fixes were necessary.

The review comes as the administration of Mayor Muriel E. Bowser (D) has put more emphasis on finding permanent supportive housing for the homeless, an approach that received less attention during the administration of her predecessor, Vincent C. Gray (D).

The city spent about $14,000 on average for services for each homeless person last year, the report found, while the number of homeless people increased by nearly 13 percent, to more than 7,700. The homeless population is expected to increase by double digits this year.

The report by D.C. Auditor Kathleen Patterson’s office found that the Community Partnership overcharged the city through a long-standing practice of receiving payment for estimated expenses before the goods and services were delivered.

The group told the auditor’s office that it then carried those overpayments into subsequent fiscal years and reconciled the use of the money with other spending on homelessness programs — a practice that runs counter to the city’s contract with the partnership, the Home Rule Act and federal and local anti-deficiency statutes. When asked about the accounting practice, the Department of Human Services did not provide an explanation or evidence of reconciliation of spending, the report said.

By law, unused funds are supposed to be rolled back into the general fund; they are not supposed to be spent without specific appropriations, the report said.

A spokesperson for the Community Partnership referred all questions to the Department of Human Services.

“I was absolutely very concerned about what I read,” Laura Green Zeilinger, director of the Human Services Department, said after reviewing Thursday’s report by the auditor’s office.

Zeilinger, who was appointed by Bowser to head Human Services, served as a deputy director of the department under Mayor Adrian M. Fenty (D).

Zeilinger, who also has served as executive director of the U.S. Interagency Council on Homelessness, said she welcomed the review. “I’ve said very clearly we need to have more clarity and accountability around the TCP contract,” she said. “I’m very eager to get a number of questions answered.”

The Community Partnership — which has been managing homeless services as a contractor with Human Services since 1993 — received more than $82 million from the city in 2014 for two separate contracts to deliver a variety of services for the homeless.

Its mission was to bring a more entrepreneurial and “customer-driven” approach to homelessness services, the report said.

The Community Partnership also oversees dozens of subcontractors.

In 2014, the report said, the Community Partnership managed 68 subcontracts, 58 of which were given out to other entities. In 10 instances, however, Community Partnership carried out the subcontracting, too — a situation in which it was effectively managing and providing oversight of itself in regard to supplies, maintenance of District-owned facilities and other services, the report said.

The report also found that imprecision in how the city accounted for programmatic and administrative expenses made it difficult to assess how efficient the programs were. After combing through the subcontractors’ spending reports, the auditors found non-programmatic costs and overhead ranged from as low as zero percent of expenses to 100 percent.

Cheh said the metric is one of the most useful measures of whether taxpayers’ money is being used well.

The report doesn’t examine the efficacy of the city’s programs, an area that Cheh said she hoped would receive more attention.

Patterson, in a telephone interview late Thursday, said the review points out the need for the city to tighten its definition of direct and indirect spending and intensify its oversight of homeless spending.

“I hope it’s a challenge and useful to the new administration,” Patterson said. “I think they’ve been pretty clear of their commitment to working on the issue of chronic homelessness.”

Robert McCartney contributed to this report.